Homework Answers
a) Coke's dominant strategy is to pic a low price in the market that is a price of $0.85 and Pepsi's dominant strategy is to keep a low price that is again a price of $0.85.
b) "C"
The Nash equilibrium is a situation where none of the firms in the market will change its strategy unilaterally or they will be facing a loss here, the nash equilibrium is both of them charging a low price.
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